Piña, commercial strategy director at Banco Deuno, a new bank in
Mexico targeting the country’s mid-income segment. Competitive
credit products and convenient branch opening hours will be two of
the tactics, he says, the bank will use to quickly win market
share.
A new bank has just opened its doors in Mexico with the goal of
targeting the country’s middle class, who, in the view of the
company, haven’t been getting the banking services they deserve.
The new outfit belongs to Ixe Grupo Financiero, a group that
also owns Ixe Banco, a bank focused on the upper, more affluent
echelons of the retail banking market.
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Banco Deuno started operations on 1 October with 12 branches in
México City and Guadalajara and some 200 staff. The bank’s initial
plans seemed nothing less than ambitious: 500 branches distributed
around the country within five years, primarily in the country’s 50
economically most important cities.
But the bank concedes that the plans will probably be reviewed
due to the global banking crisis, which is now affecting the
Mexican financial sector.
There is also the question of Citigroup’s Banamex franchise, the
country’s second-largest retail bank.
Deeply-troubled Citi is selling off chunks of its empire in a
bid to reduce its asset sheet by $500 billion – a disposal of
Banamex, which Citi has said is not on the cards, would have huge
repercussions for the Mexican market.
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By GlobalDataTargeting the middle classes
Banco Deuno’s focus on credit products and services is based on
a growing appetite for credit from Mexico’s more affluent middle
income segment; the goal, which is conservative, is to amass 1.25
million such clients over the next ten years.
One target is people who are already indebted and would like to
restructure their loans to pay lower interest rates over longer
terms – Javier de la Calle, the general manger and CEO of Banco
Deuno has said Mexico’s banks have been too quick to concede loans
to the expanding middle classes, mostly by granting them credit
cards, and now debt levels are becoming too high.
The new bank is also claiming it will offer the longest hours in
the Mexican banking market, with branches opened from 8.30 am to
8.00 pm on weekdays, and on Saturday mornings too.
Gerardo Piña, commercial strategy director, told RBI that the
Ixe group decided to set up Banco Deuno to have two independent
brands catering for two identifiable segments.
“It’s the same logic of those companies that have different
brands for distinct market segments,” he said. “To avoid
contaminating the Ixe Banco brand, we’ve created a new bank to
target the middle classes.”
Ixe Grupo Financiero has requested from the financial
authorities authorisation to merge the operations of the two banks,
though the two brands will continue working separately and focus on
different markets.
“The merger will give us a better capital structure and will
make it easier for us to have access to money,” he said. “And it
will help us to reduce costs too.”
Distinct identities
The two banks have different brands and their branches will
maintain distinct identities, Piña stressed. 
While Ixe Banco has a strong reputation among higher earners,
Piña describes the potential clients of Banco Deuno as individuals
with incomes between MXN12,500 and MXN66,000 per month – equivalent
to a range between $940 and $5,000. They live in the 50 top cities
in Mexico and are employed by companies, although small
entrepreneurs are targeted too.
“In general, they are people who are trying to improve their
standard of life,” he said.
Although the Mexican market is still deemed to have low
bancarisation levels, Banco Deuno expects to draw clients who
already work with other banks but are looking for better
service.
“For instance, those people don’t have access to real loan
products, other than credit cards. They only have expensive loans,
and we want to present them a more comprehensive and friendlier
offering. The idea is to help them to create wealth,” Piña
said.
Banco Deuno is putting greater emphasis on contact between
clients and financial advisers in an attempt to define borrowing
capacity and investment priorities. It is also, Piña stressed,
pushing direct channels such as ATMs and in-branch computer
terminals to get customers to use low-cost distribution
services.
Personal focus
The bank is initially offering four products for personal
clients. Two of them are non-remunerated current accounts which
require an average balance of MXN2,000 and few charges.
One of the accounts offers more services but clients are
required a minimum deposit of MXN4,000 to open it. The other two
products are a saving account for clients with a least MXN5,000 and
a credit line of MXN10,000 or more that can be settled in 12 to 36
months. A current account and a credit line for small and medium
companies is also available.
Credit cards with Visa and MasterCard brands have also just been
launched and is expected to attract customers of other brands who
think they are paying too much on their balances.
Car and mortgage loans are set to follow in the forthcoming
months, while insurance is also on Banco Deuno’s radar, Piña told
RBI.
